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Author: MikeMatheson Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 17919  
Subject: Re: Last to Die Insurance Date: 4/7/2001 7:16 PM
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Intercst,

First of all, I don't think you read closely enough. The total death benefit consists of :

(1) The Original Sum Assured
(2) The Return of All Premiums Paid
(3) The Interest you WOULD HAVE earned had you invested the premiums elsewhere at an after tax 6%

I agree that six percent isn't terribly impressive - IF we are talking about a simple return on investment. However, we aren't. We are looking at a plan that has this IN ADDITION to the orginal amount of insurance AND getting all the premiums back.

You are also trying to compare a guaranteed death benefit with a fluctuating return on investment. What's more, you are using the past to try and predict the future. The 30 years between 1911 and 1941 are not like the 30 years between 1941 and 1971 , and are FAR different than the 30 years between 1971 and 2001. Between now and 2031? Who knows? I will not be the one to predict that this next 30 years will give us better (or worse) returns than any other time in history.

Investment returns are a funny thing too. If I invested $100,000 a year ago and lost 25%, I'm down to $75,000. I now need to get a 33.33% return to get me back to square one. If I need to make sure I time my death right, then I'm not interested in this type of "planning."

While I am impressed with your ability to find charts and reproduce them here, I don't think you have proven that you can be assured to do better than the guaranteed TAX-FREE benefits available with Life Insurance. There is no better way to handle your estate taxes.

=MPM=
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